Inverted Duty Structure means a situation where the rate of tax paid on inputs goods/services is higher than the rate of supplies. Inverted Duty under GST It’s a situation where taxes paid on purchases is higher then the taxes paid on the supplies.Refund of Inverted Duty Structure GST.
For Example : – ABC Ltd who deals in manufacturing of Inverter , for which company buys input raw material at 18 % say GST paid is Rs. 100000/- . The final product is inverter on which say GST Rate is 12 % and GST payable is Rs. 65000/-. Is this situation this is inverted duty structure of GST.
Example : – X Ltd who deals in manufacturing of generators , for which company buys input raw material at 18 % say GST paid is Rs. 200000/- . The final product is Generator on which say GST Rate is 12 % and GST payable is Rs. 130000/-. This is inverted duty structure of GST.
(ii) where the credit has been accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the government on the recommendation of the Council:Provided further that no refund of unutilized input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty:
Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies.”
|Turnover of inverted rated supply||5,00,000|
|Input Tax Credit||1,50,000|
|Adjusted Total Turnover||10,00,000|
|GST Rate payable on Inverted rate 12%||60,000|
|Refund of Inverted Duty Structure GST||15,000|